Xiaomi Eying India As Next Big Smartphone Growth Market

Privately held Chinese smartphone manufacturer Xiaomi Corp. is eying India as the next large market to drive growth in the mobile device sector. The dominant Chinese smartphone player is looking to expand out of its home market and become a globally known mobile device manufacturer. India will be a major target in the planned global expansion.

Around 13.5 million smartphones were shipped to India during the first quarter, compared with almost 97 million devices sold in China, based on data from market researcher Canalys.

August Interview with Xiaomi Vice President Hugo Barra

“It is the biggest market for us beyond China, it will someday be as big as China,” former Googler and Xiaomi Corp. Vice President Hugo Barra said in a phone interview from Bengaluru on August 6th. “We are coming into India with full force.”

“We have to ramp up,” Barra said in the Aug. 6 interview. “It’s not something we can do immediately because we are subject to manufacturing constraints.”

Xiaomi in India

Xiaomi, founded in 2008, is entering a market where Samsung and Indian manufacturers Micromax Informatics Ltd. and Karbonn Mobiles India currently represent more than 60% of sales, where wireless carriers generally do not subsidize new devices, and where there are relatively few Chinese speakers familiar with the firm’s products.

Xiaomi Corp. has held three very successful online sales in India so far (totaling 35,000 devices). To date, sales in India have been driven by word-of-mouth, and Xiaomi underestimated public interest when it examined social media to gauge demand for its products More than 200,000 people registered to participate in online sales events, Barra, who moved to the southern city of Bengaluru to lead Xiaomi’s efforts, said.

Xiaomi is beginning its global push with sales in 10 new markets in 2014, including Brazil and Russia. The firm built its own websites in Singapore and Taiwan, but establishing a sales platform in India has proved more problematic because the infrastructure for delivery and collecting payments in the country is poor.

“We know it’s a market where it will pay off to really build a local brand in a full-on local operation,” Barra emphasized. “We’ve got to move faster than what we previously assumed.”